Tax Saving Plan for Employed People

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Tax saving plans
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Tax Saving Plan for Employed People
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• Employed people have less scope for tax savings
  as compared to self employed people.
• If you are currently employed, the income and
  benefits from and related to your employment are
  taxed and you cannot claim any deductions against
  employment income except that are specifically
  allowed by the system.
• Here are some taxes planning techniques which can
  lead to save taxes
• Arrange to get non taxable benefits There are
  some employment benefits which are not taxable
  like contributions to a registered pension plan,
  contributions to a group sickness or accident
  insurance plan, contributions to a private health
  services plan, all or portion of the cost of free
  or subsidized school services for your children.
• Ask to have your source withholdings reduced
  wherever possible In any situation where you
  expect to receive a refund after filing your
  return, you should review the form which you file
  with your employer and seek to have source with
  holdings reduced. If you get a refund, that means
  the CRA has been holding your money and not
  paying you interest on it for many months. It is
  better you can send a cheque to the CRA at filing
  time so that you can use that funds in the
  meantime.

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• Pay interest owing on loan from employer by
  January 30 of the following year
• If you receive a low interest -free loan from
  your employer, you are considered to have
  received a benefit from employment. The benefit
  is set at the CRA's current prescribed rate of
  interest minus any interest you actually pay
  during the year or within 30 days after the end
  of the year. This will provide you with a cash
  flow advantage.
• Consider employee's profit sharing plans for
  cash flow purposes there is no source
  withholding on the amounts paid by the plan to
  you. Careful timing of the employers'
  contributions and the plan's disbursements can
  give you better cash flow than would a straight
  bonus payment.
• Transfer retiring allowances to an RRSP If you
  transfer the entire retiring allowance into an
  RRSP, the legal fees will never become
  deductible. When you take payments out of the
  RRSP, they are no longer considered a retiring
  allowance.

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• Claim the employment tax credit to help cover
  your work related expenses Employees can claim a
  15 tax credit to help cover their work related
  expenses.
• Tax saving plans Employed trades people can
  claim the deduction for the cost of new tools If
  you are an employed trade person and you must use
  your own tools on the job, you can deduct the
  portion of the cost of new tools.
• Source http//bit.ly/2s7gFZ5